The Concept of Founder-Market Fit

Product-market fit has become one of the top buzz terms this past year in the world of start-up technology. Lately, however, a few venture pundits have been writing about something different. It’s the concept of founder-market fit.

The idea is that when you start a business you don’t know exactly what your product is going to look like. You also don’t know how your customers are going to respond, but the more in-tune you are with the market, the better off your chances to build a fitting solution. this typically means you’ve logged many hours with either the discipline or particular industry.

This concept was first presented to me four years ago by a close friend and mentor of mine, Charlie Paparelli. Charlie is an Atlanta angel investor and has had great success in tech entrepreneurship. He expresses that he looks at people first when exploring each investment. Are they building a business in an industry they know and love? Are they solving a problem that they have felt first hand? Are they on a mission that follows the path of where they’ve come from?

Having a strong “founder-market fit” means you have a better chance of finding the “product-market fit” in time to be successful.

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Kyle, are these investors simultaneously cautious about the risk that a founding team may assume their own experience represents the market at large, and therefore may take shortcuts in market validation?

I’m sure that occurs frequently. All things being equal though, I imagine investors would prefer the domain expertise over not having it. They’d probably expect that every entrepreneur will recalibrate until they run out of money or get traction. Founder-market fit would state that the ones most familiar with the space would have a higher likely-hood of finding validation, even if they start with short-cuts. Short-cuts could even be positive. The more narrower your assumptions/hypothesis, the quicker you can realize if they’re any good.